A CCJ is a pretty serious financial mistake and if you get one your credit score could take a tumble!
CCJ is the short name for a County Court Judgment – and it isn’t a good thing to have on your credit history as it shows you’ve mishandled the repayments on your debts. But just how much does a CCJ affect your credit score… a lot? A little? We find out in this article!
When will I get a CCJ?
So you miss a payment… oops, you missed another… and then another… well, this is when you’re likely to be issued with a default notice. This is a formal letter from your lender, stating how much you owe and how to repay it otherwise legal action will be taken.
If you don’t respond to this warning letter, you’ll be handed a CCJ. Now a CCJ is a court order to ensure you pay back what you owe as the lender’s previous reminders and warnings have gone unnoticed. Failing to make the required payments on a CCJ can lead to more serious forms of legal action – such as hiring bailiffs and taking payments directly from your wages – so we strongly recommend keeping up with your agreed repayment plan.
The price of a CCJ
A CCJ won’t leave your credit score in the best state – costing you around 250 points. That means you could go from having an excellent credit score to a fair credit score... or fair to very poor.
However, most people who get a CCJ will have already received a default notice and this is even worse than a CCJ in the number of points that will be deducted. You’ll lose around 350 points for a default alone. So if you receive a CCJ too, the total amount of points lost could be as much as 600 – which will ruin your credit history and rating.
As these financial mistakes get older, they aren’t considered as bad. So when your default is two years old, it might only affect your credit score by 250 points… and at 4 years old, it drops down further to 200 points which could increase your chances of getting accepted for credit.
How long does a CCJ stay on my credit report?
Don’t worry, a CCJ won’t stay on your account forever… and your name won’t go on some kind of credit blacklist.
The worst case scenario is that the CCJ will stay on your credit report for 6 years. After that, all financial mistakes (no matter how serious) will get wiped off – meaning lenders will no longer be able to see them when they credit check you. This could greatly increase your chances of being approved for finance, providing you’ve had a clean credit history since the CCJ.
You could get your CCJ removed completely…
Six years is a long time to have a CCJ damaging your credit report. However, you’ll be pleased to know that there is a way to get it removed much sooner than that… but you’ll have to act quickly. All you need to do is pay off your CCJ in full within one month of receiving the judgment. You can then apply to the Registry of Judgments, Orders and Fines to get your name taken off the register. Sorted.
If you end up paying off the CCJ after the initial month, it’ll be marked as ‘satisfied’ on your credit report where it’ll stay for 6 years. Lenders will look more favourably at a satisfied CCJ when assessing you for credit – so at the very least make sure it’s fully paid off!
For more information on how to get accepted for loans when you have bad credit, click here.
The statistics in this article were sourced from Debt Camel, and are solely based on Experian’s points system and can vary from person to person.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.